Freeport’s earnings plummet

The biggest disappointment for mining investors over the holiday-shortened period that ended Jan. 20 was the evaporation of quarterly earnings in Freeport-McMoRan Copper & Gold‘s latest report.

A fourth-quarter profit squeaked in at US$200,000 on revenue of US$446.1 million, down from a profit of US$64.1 million (US41 per share) on revenue of US$571 million a year earlier. The financial hit was the result of a large, fatal rockslide in October 2003 at the enormous Grasberg pit in Indonesia. Freeport still hasn’t recovered, from an operational viewpoint, stating it would defer to 2005 the mining of higher-grade portions of the pit. Freeport closed the week at US$38.50, down US$1.56.

While gold prices headed south and profit-taking set in among the gold stocks, there were two good-news stories out of Nevada:

— Denver-based Queenstake Resources boosted reserves at its wholly owned Jerritt Canyon high-grade mine in Elko Cty. Since June, the reserve has more than doubled to 820,104 oz., and resources in the measured and indicated categories now total 2.3 million oz. Another million ounces are in the inferred category. Queenstake held steady at C83 on the week.

— Over in western Nevada, 160 km southeast of its home base of Reno, Metallic Ventures Gold brought Nevada’s newest gold mine, Esmeralda, into production. The company has started up a 350-ton-per-day carbon-in-leach circuit that is processing low-grade development ore while high-grade ore is being mined and stockpiled for later processing. Metallic’s shares were off a nickel to C$7.75 in Toronto trading.